Wednesday, October 22, 2014

Protect your family - Update your Life Insurance Beneficiaries!

Life Insurance is a great way to ensure that your family will not endure financial hardship in the event of your death. At Insure the Lake, we provide you all your options to allow you to make a good decision on how much coverage is needed to protect your family. One of the important elements of any Life Insurance policy is identifying your beneficiaries. Keeping this information updated is also important if you have recently gone through any life changes such as a divorce, new child, or change in your family situation.

Types of Beneficiaries

Primary beneficiary – This will be the primary
person who will receive the proceeds from your life insurance or financial
accounts. You can name multiple primary beneficiaries, and they will
then share the assets.

Contingent beneficiary – These people are
the “backup,” or secondary, beneficiaries because they will only receive
the proceeds of your accounts if the primary beneficiaries have died,
cannot be located or refuse to accept.

It Matters!

Your will takes a back seat to these beneficiary designations in case of your death. This includes:

Life Insurance

Retirement Savings

Financial accounts

Other assets

If you have not listed anyone as a beneficiary, your assets will follow a
default order to determine who will receive it, such as your spouse,
your children, your parents and then your siblings. Listing a
beneficiary—and keeping it updated—will save time, effort and potential
conflict after you’re gone.

Common Mistakes

Even after naming a beneficiary, you need to update the
names whenever there’s a change in who receives your assets. A
few common mistakes include not adding a spouse after marriage, not
adding children as they are born, leaving an ex-spouse named after a
divorce and leaving parents and siblings listed after you married and
started your own family.

Update whenever you have a significant life change!

Whenever you experience a life change such as marriage, divorce, death
of a spouse or child, birth of a child or grandchild or similar event
that alters your family, you should review your beneficiary designations
and make any necessary changes. You should also update your beneficiary
listing when a beneficiary changes his or her name, such as an adult
child getting married. If you’re not sure how to change your
beneficiary, check with your human resources department, Lake of the Ozarks life insurance
carrier or financial institution, and someone there should be able to
guide you to the correct forms or process to change it.